Infrastructure (Financial Assistance) Bill

Stephen Timms Excerpts

Monday 15th October 2012 Commons Chamber

[Chris Leslie]

At near enough to 7 o’clock, I am glad that we finally turn our attention to the Infrastructure (Financial Assistance) Bill. Anybody following these proceedings might be astonished that we have been allowed just over two hours for the Committee stage. In our view it is unsatisfactory to leave the rules governing £50 billion of public expenditure to such scant and inadequate scrutiny. Although we do not necessarily disagree with the broad principles behind the Bill, that does not mean that we should fall short in our duty as parliamentarians to analyse, consider and improve the details of the legislation. Ministers cannot point to the House of Lords as the place where the Bill can be improved and amended if we run out of time for consideration in Committee. I think the last time the Lords sat in Committee on a money Bill was in 1995, when it considered the European Communities (Finance) Bill. This two-hour period is therefore the only opportunity we will get to scrutinise the particulars of the legislation; hence the amendments that are before us.

I want to talk to amendments 11 and 9 in this first group. Amendment 11 would make it clear that the substantive powers in the Bill, which give Ministers the ability to grant financial assistance to any persons, should be used for infrastructure in the United Kingdom, for essentially this reason: we believe that we should focus all our efforts on the domestic infrastructure needs of our country. That is why we think the Bill, if it can bring benefits, needs to focus very much on the benefits of infrastructure and bringing forward capital schemes here at home. Hon. Members will be aware that the UK has been falling behind quite considerably in the past couple of years in terms of infrastructure and capital investment schemes. Only today in the Financial Times we read about the Construction Products Association warning that

“infrastructure is in free-fall,”

and that it expects spending to fall by 13% in 2012 compared with the last calendar year, despite the hollow words of the Chancellor of the Exchequer. Noble Francis, economics director at the CPA, said:

“We are getting to the stage where the government just can’t make more announcements with nothing happening. At some stage they are going to have to launch some capital investment that sees work happening on the ground. This can be done quickly, easily and cheaply speeding up work on the repair and maintenance of roads, schools, hospitals and housing.”

The article points out that road construction, to take one example of infrastructure investment,

“is suffering in particular, with the CPA projecting a decline of 40 per cent this year and 5 per cent next year.”

[Stephen Timms (East Ham) (Lab)]

I am listening to my hon. Friend’s speech with a lot of interest. I wonder whether he saw the recent CBI survey and the comments by its director general, John Cridland, who described it as

“a wake-up call that businesses in Britain are looking for action”—

on infrastructure—

“and we haven’t seen any yet.”

[Chris Leslie]

Alarm bells are ringing from a number of eminent institutions across the country, and they are not those that one might necessarily feel were natural allies of Her Majesty’s loyal Opposition. Nevertheless, they are saying exactly the same thing as us: when will the Treasury wake up and realise that the Government’s strategy on infrastructure—this laissez-faire approach—is singularly failing? Rather than driving new schemes forward, with their Bill and the rest of their strategy, the Government seem to be waiting for others to come forward with various schemes; they seem to be saying, “Please will you dream up some ideas?” They are hoping that something will turn up, but that is an approach characterised by drift rather than leadership when it comes to capital investment.

--- Later in debate ---

[Stephen Timms]

My hon. Friend has talked about organisations that are not necessarily natural supporters of Her Majesty’s loyal Opposition. Has he seen the recent comments from the Country Land and Business Association, which described the superfast broadband situation as “lamentable”—precisely the same word that he has just used? The association stated:

“It is becoming clear that the Government’s strategy will not meet the target date of 2015…There is no clear mechanism to put in place the universal service commitment.”

Is not this another example of the economy crying out for investment that is simply not being delivered?

[Chris Leslie]

My right hon. Friend makes an important point that emphasises the argument that we are making. This is not simply a question of the levels of capital investment; it is also a question of competence. It is also about the relentless need to focus on delivery, and on the detail behind the delivery. I just do not see the Treasury, as currently comprised, being capable of getting to grips with the granularity of some of the obstacles that face capital schemes. It is no wonder that we are falling further and further behind. The Treasury seems to see an obstacle and be deterred by it, rather than trying to tackle it and move past it.

--- Later in debate ---

[Chris Leslie]

A pattern is emerging, but I shall not use the word “omnishambles”, which is probably past its best. There is great concern about these schemes. Thameslink, for example, is a project that is slipping considerably. The contracts for rolling stock were due to be awarded by early 2012; then it was by the summer, and now the Department says that the contract with the preferred bidder will be signed in the autumn. The Transport Select Committee is on top of that issue. It is writing to Secretaries of State asking why there is a delay with the rolling stock procurement, and I am sure that the Minister will be able to reply to that question when he responds to the debate. However, many other significant questions about delay need to be answered.

We need to know about the ongoing programme of work on the north Doncaster chord, a rail link that is greatly needed in that part of Yorkshire. The national infrastructure plan of 2011 promised that a business case would be provided by April 2012, but the proposed development is still awaiting a decision from the Secretary of State, which must be delivered before production can continue and construction can start.

The preferred bidder for the extension of the Northern line to Battersea was announced in June. A Treasury source then told the Evening Standard:

“The entire weight of the Government is being thrown behind the extension of the Northern Line”,

but nearly a year after the Chancellor’s autumn statement, the extension is still subject to the existence of funds. Despite backing from the

“entire weight of the Government”,

Transport for London can only say:

“Subject to funding being in place and permission from the Secretary of State for Transport, the new stations could be open by 2019.”

The construction of the Green Port Hull was due to begin this year, but Siemens now says that it will not sign a contract for the wind turbine factory until 2013. As for carbon capture and storage, the Department for Energy and Climate Change was supposedly

“developing a streamlined selection process”,

and £1 billion of capital was supposedly available to support the project, but construction is not due to begin until 2014.

Planning permission was granted in March for biomass electricity generation at Royal Portbury dock, but E.ON is currently taking time to

“review the prospects for the project in light of the UK Government’s current banding review”.

Again, a Government decision is awaited.

I am sure that I do not need to mention the issue of the 4G mobile spectrum auction and roll-out. Many Members may be checking their not necessarily 4G-compatible handsets as I speak. However, I will say that a very messy approach was taken to the auction of that particular regulatory arrangement, and that anyone who may be thinking of buying an iPhone 5 should be careful, because it will not necessarily be compatible with many possible providers. This is an example of our falling many years behind the United States, Germany, Sweden and parts of Asia. Unlike this country, they already have 4G services which are giving businesses opportunities to benefit customers.

We need only compare the much-vaunted promises of the 2011 national infrastructure plan with the actuality of the infrastructure pipeline that was announced in April. Although 182 new projects had been added, 63 had disappeared without explanation. Of the 357 projects announced in November that were updated in April, nearly two thirds were still in pre-procurement stages, and just 38 had proceeded to procurement or construction. Of the 229 that were still at the pre-procurement stage, three quarters were still at the same stage as had been reported in November 2011, and 36 had moved backwards.

Members may recall the regional growth fund, the supposed successor of the regional development agencies and, supposedly, the Government’s flagship alternative for regional economic development. Although the winners were announced in, I believe, April 2011, fewer than half the final offer agreements in rounds 1 and 2 of the fund have been put in place. Only £60 million of the £1.4 billion fund to spur growth has been released to businesses, and, according to a report by the Public Accounts Committee, the £364 million spent by the fund so far has been held up in intermediaries such as banks and local authorities.

[Stephen Timms]

My hon. Friend is making a powerful case, and I hope that we shall hear a response to it shortly. Has he seen the assessment by the British Chambers of Commerce which—before the election, I believe—identified 13 critical infrastructure projects, and said that although three were going ahead, there had been little or no progress on eight of them? That is a lamentable situation. Businesses across the country are desperate for those projects to go ahead.

[Chris Leslie]

It is very difficult to find an explanation for this Keystone Cops approach to infrastructure schemes, other than that the Government are incapable of getting to grips with the detail. I welcome the Minister to his position—he may be a new broom who will sweep everything clean, deal with the issues firmly and move many of these infrastructure projects forward—but I want to hear about his strategy for improving infrastructure on these shores, in the United Kingdom.